Alleges FEMA violation to the tune of Rs 1,990 cr.
Expediting its investigations into alleged breaches of the Foreign Exchange Management Act, 1999, by Adani Exports Ltd, now known as Adani Enterprises Ltd (AEL), the Enforcement Directorate (ED) has filed a complaint against the Ahmedabad-based entity and its associate companies for alleged artificial enhancement of export value of goods.
In April 2009, the Special Director of Enforcement (SDE) had issued a showcause notice for alleged violation of foreign exchange law to the extent of Rs 1,990 crore. According to a status report, the agency has completed its investigation and filed a complaint. However, adjudication proceedings are pending before the SDE, Mumbai.
The ED has given copies of the documents relied on (during the investigation) to Adani Enterprises and its related companies — Aditya Corpex Pvt Ltd, Jayant Agro Organics Ltd, Hinduja Export Pvt Ltd, Bagadiya Brothers Pvt Ltd and Midex Overseas Ltd.
An e-mail seeking AEL’s response remained unanswered and company officials were not available for comment.
The ED has also been probing the issue of availing buyers’ credit, import and export of cut and polished diamonds, and opening bank accounts and setting up companies abroad without Reserve Bank of India (RBI) approval.
For instance, the ED has called for documents pertaining to buyers’ credits from two banks and their officials have also been examined. Similarly, AEL officials will also be interrogated in respect of the trade credits availed by the entity. Apparently, in 2004-05 and 2005-06, AEL had availed buyers’ credit worth $1,810,839,320, equivalent to Rs 8,149 crore, from various banks. While investigating AEL’s import and export of cut and polished diamonds, ED is also probing whether subsidiaries at Dubai and Singapore were used in routing the funds from different sources for funding the said import and export transactions (pertaining to cut and polished diamonds). The foreign subsidiaries being probed are Adani Global FZE, UAE; Adani Global Ltd, Mauritius; Adani Global Pte Ltd, Singapore; Adani Shipping Pte Ltd, Singapore, and Adani Virginia Inc, USA.
ED is also probing indications, it says, that AEL opened four other companies in Singapore and overseas bank accounts without RBI approval.